FIN 320|70 Final Exam |End Of Sem Questions With Correct Answers|2024
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Course
FIN 320
Institution
FIN 320
3 investments, each pay 100 mo, with an 8% interest rate. one is an ordinary annuity, one is an annuity due, and the third is a perpetuity. which statement is correct given these three options? - ️️present value of a perp has to be higher than the present value either the ordinary annuity or an...
FIN 320|70 Final Exam |End Of Sem
3 investments, each pay 100 mo, with an 8% interest rate. one is an ordinary annuity, one is an annuity
due, and the third is a perpetuity. which statement is correct given these three options? - ✔ ✔
present value of a perp has to be higher than the present value either the ordinary annuity or annuity
due
A bond trader just purchased and resold a bond. The amount of profit earned by the trader from this
purchase and resale is...... - ✔ ✔ bid-ask spread
A firm decides to make a decision that decreases their liquidity. What decision did the firm just make? -
✔ ✔ cash purchase on inventory
All else held constant, PV of a bond increase when the.... - ✔ ✔ yield to maturing decreases
An agency issue is most apt to develop when..... - ✔ ✔ the control of a firm is separated from the
firm's ownership
Assume all else is equal. When comparing savings accounts, you should select the account that has the -
✔ ✔ highest effective annual rate
Bonds are described at which form of loan? - ✔ ✔ Interest Only Loan
Capital budgeting includes the evaluation of what? - ✔ ✔ size, timing, and risk of future cash flows
EPS measures the net income with respect to - ✔ ✔ the profit or loss for each share of stock
Firm is a separate legal entity and shares ownership of that firm on a 50/50 basis. What type of entity
did they create if they have no personal liability for the firms debt? - ✔ ✔ Corporation
For a risky security to have a positive expected return but less risk than the overall market, the security
must have a beta..... - ✔ ✔ that is > 0 but < 1
Generally speaking, payback is best used to evaluate which type of projects? - ✔ ✔ low-cost, short-
term
Given an interest rate of 0%, the future value of a lump sum invested today will always... - ✔ ✔
remain constant, regardless of the investment period
If a firm has an inventory turnover of 15, the firm... - ✔ ✔ sells its entire inventory an average of 15
times each year
If an investment is producing a return that is equal to the required return, the investments NPV will be...
- ✔ ✔ zero
, In what year was SARBOX enacted by congress? - ✔ ✔ 2002
Jamie earned $14 in interest on her savings account last year. She decided to leave the $14 in her
account so that she can earn interest on the $14 this year. The interest earned on last years interest
earnings is called.... - ✔ ✔ interest on interest
Janis just won a scholarship that will pay her 500 a month, starting today, and continuing for the next 48
months. What term describes these payments? - ✔ ✔ Annuity due
Jenna has been promoted and is now in charge of all external financing. in other words, she is in charge
of? - ✔ ✔ Capital Structure Management
Jenny needs to borrow 5500 for 4 years. The loan will be repaid in one lump sum at the end of the loan
term. Which one of the following interest rates is best for Jenny? - ✔ ✔ 6.5% simple interest
John owns a stock with a market price of $38 per share. This stock pays the same annual dividend of
$.60 per share. If the price of the stock suddenly decreased to $33, you would expect the..... - ✔ ✔
dividend yield to increase
Lee pays 1% per month interest on his credit card account. When his monthly rate is multiplied by 12,
the resulting answer is referred to as the....... - ✔ ✔ annual percentage rate
Miller Farm Products is issuing a 15 year, unsecured bond. Based on this info, you know that this debt
can be best described as...... - ✔ ✔ debenture
Over the past year, a firm decreased its current assets and increased its current liabilities. As a result,
the firms net working capital - ✔ ✔ had to decrease
Production equipment is classified as...... - ✔ ✔ a tangible fixed asset
Russell has a bond issue outstanding. The issue's indenture provision prohibits the firm from redeeming
the bonds during the first five years following issuance. This provision is referred to as the.... - ✔ ✔
deferred call provision
Semi-strong form market efficiency states that the value at a security is based on..... - ✔ ✔ all
publicly available info
Smith and Son's co. has a current ratio that is average in comparison to their industry, however, their
quick ratio is significantly lower than their industry average. The following can be concluded... - ✔ ✔
Smith and Sons has higher inventory than the industry average
Stacy deposits 5000 into an account that pays 2% interest, compounded annually. At the same time,
Kurt deposits 5000 into an account paying 3.5% interest, compounded annually. At the end of 3 years....
- ✔ ✔ Kurt will have a larger account value than Stacy
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